A month has gone by since the last earnings report for Nextgen Healthcare (NXGN). Shares have lost about 14.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nextgen Healthcare due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NextGen Q2 Earnings Beat, Revenues Miss Estimates
NextGen Healthcare reported second-quarter fiscal 2020 adjusted earnings per share of 24 cents, flat with the year-ago quarter’s figure. The metric edged past the Zacks Consensus Estimate by a penny.
Revenues totaled $134.3 million, up 3% year over year. However, the figure missed the Zacks Consensus Estimate by a nominal 0.1%.
Bookings for the quarter came in at $36.6 million, up 1.4% from the year-ago quarter’s figure.
The company reported second-quarter fiscal 2020 revenues under the following segments:
Total Recurring revenues grossed $120.6 million, up 3.7% from the year-ago quarter’s figure.
Meanwhile, total Software, hardware and other non-recurring revenues came in at $13.7 million, down 2.4% on a year-over-year basis. Per management, this reflects headwinds in the managed services and software areas.
In the quarter under review, gross profit totaled $68.5 million, down 1%% from the prior-year quarter’s tally. Gross margin was 51%, down 210 basis points (bps).
Adjusted operating income in the fiscal second quarter was $75.4 million, down 3% from the year-ago quarter’s figure. Adjusted operating margin, as a percentage of revenues, was 56.2%, down 340 bps.
Fiscal 2020 View Retained
For fiscal 2020, NextGen continues to expect revenues between $536 million and $550 million. The Zacks Consensus Estimate for revenues is pegged at $541.8 million, which is within the guided range.
Full-year EPS are expected between 82 cents and 90 cents. The Zacks Consensus Estimate for EPS is pegged at 85 cents, which is within the projected range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -20.31% due to these changes.
Currently, Nextgen Healthcare has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nextgen Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.